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UVA-F-1468
CONCIERGE CLUB: SERIES A ROUND
As Mary Naylor, founder and CEO of Concierge Club, completed her presentation to the Dinner Club, a Washington, D.C.-based angel-investor group, it was clear that everyone was impressed by the business plan and her energetic style. Naylor was looking to raise $6 million of additional funding for the company in a Series A financing round in December 1999. The goal of Concierge Club was to become the first nationwide concierge service to offer full Internet capabilities to companies seeking to offer such service as a customer or employee benefit. The idea behind Concierge Club was that, by combining various niche service segments with the Internet, the company could provide its customers with “an immediate, convenient, one-stop source for dining recommendations, purchases of flowers, gifts, gourmet foods, tickets, travel, and business discount offers.” Many of the potential investors could envisage themselves saving time by using the company’s 24-hour concierge services. But just because the investors could see themselves as potential customers did not prove that the company would be a viable investment opportunity. How realistic were Naylor’s best forecasts? What was her competition? Could the company really perform on the national level with a service based on exceptional local knowledge and assistance? Finally, given that the $6 million of funding was substantially larger than any of the previous rounds, would the company provide an adequate return to investors?
The Opportunity At its inception, in 1987, the concierge-service industry consisted of on-site, staffed concierge services for commercial office buildings, residential buildings, and corporate headquarters. In the early years, it was a highly fragmented cottage industry composed primarily of small local operators. As concierge services started to grow as a marketable employee benefit for large national employers, the industry grew rapidly. The market for concierge services in the early 1990s was estimated to be $50 million annually, with the potential to exceed $200 million a year with the addition of e-commerce capabilities by 2000. Many of the most popular goods and services purchased through concierge services were also in rapidly growing industries. For
This case was prepared by Susan Chaplinsky, Professor of Business Administration, and April Triantis, Associate Professor of Law, University of Virginia School of Law, with the assistance of Gavin Cook (MBA ’04). It was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright © 2005 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to
[email protected]. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation. ◊
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example, total Internet floral and gift sales exceeded $642 million in 1998, and were projected to reach $1.9 billion by 2000, presenting a large potential market in which concierge-service providers could carve out a niche. Concierge Club was formed in 1997, as a spinoff from Naylor’s first business, Capitol Concierge, to provide concierge services to national clients. It was through Capitol Concierge that Naylor had acquired more than 11 years of experience in providing hotel-style concierge services to the commercial office market. She and the rest of the management team hoped to leverage that experience to develop a personalized, 24-hour-access, Web-enabled concierge service. The company’s primary objective was to become the virtual concierge service of choice for companies that offered value-added benefit programs to customers or employees. Positioning itself as a marketing service promoting customer and employee loyalty, Concierge Club intended to build its end-user customer base through Internet partner links (affinity partners) and corporate-sponsored partner links promoting customer or employee benefits. “Our business model was pretty unique,” Naylor said, “as we were operating as a B2-B2-C provider.” The company also would develop “regional concierge partners” in major markets to actually deliver the necessary personal concierge services (e.g., housecleaning, home, and auto services).
Capitol Concierge Mary Naylor started her first company, Capitol Concierge, in 1987 with $2,000 borrowed from her mother. The idea for her company arose when Naylor found herself on a cross-country flight with nothing better to read than an in-flight magazine. She recalled: “There was an article about a woman in California doing something similar—but there was absolutely no one doing anything like this in Washington.” Naylor returned to D.C. and immediately began planning her business strategy. Instead of marketing her services to individuals, Naylor focused on companies that needed to differentiate themselves from their competition to improve brand loyalty and customer retention. She targeted building managers who had incentives to impress their tenants and companies looking to attract top talent. She attempted to persuade them to offer her service as a perk. She figured she could charge property managers $5,000 a month to put a concierge on site and make a profit on those fees alone. Her big break came in June 1988, when the Charles E. Smith Company, a multibillion-dollar real estate development firm in Washington, D.C., recruited her to provide concierge services for its downtown building at 1667 Case Street. That first client was quickly followed by a second, as the concierge concept was an immediate hit with the office clientele. New business for Capitol Concierge followed soon thereafter. By 1990, Capitol Concierge had 26 clients, and Naylor was providing on-site concierge services in more than 30 offices and residential apartment buildings, which generated annual revenues of $2.5 million. The success of Capitol Concierge, however, was proving to be a
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double-edged sword. As the company attracted new entrants into the market, the fast-paced growth drained the business of cash. That was when her accountant introduced her to Cal Simmons and Mark Tietelbaum, two successful local entrepreneurs turned angel investors. Impressed by Naylor and her proof of concept, Simmons and Tietelbaum together invested $100,000 in Capitol Concierge in return for a 50% share of the company and seats on the board. Although Naylor was satisfied with the progress the firm had made, it was becoming apparent that she would have to modify her business model to attract new customers and keep the ones she had from migrating to competitors entering the regional on-site concierge market. In early 1992, Naylor developed a way to leverage the client information collected on each transaction and, in doing so, became a pioneer in what later became known as “one-to-one” marketing. She began by automating information that was typically entered only in the concierge logbooks. She then took that information and used it to create a centralized database that gave her company the ability to offer what she called “proactive services.” She described the process: “Say we have a client who orders flowers for a friend’s birthday. That information becomes part of our database, and about two weeks in advance of that birthday the following year, the computer system will prompt us and we can call that client and say, ‘Your friend’s birthday is coming up. Would you like us to take care of ordering flowers for you?’” That strategy proved to be just the ticket for Capitol Concierge. Given the steady consumer and client growth in the concierge-services market, Naylor and her team were on the brink of great things. Capitol Concierge managers quickly learned that traditional, untargeted mass-marketing techniques aimed at individuals did not work. Instead, in keeping with the firm’s one-to-one marketing strategy, management focused on a small group of the company’s best customers. The concierges were encouraged to use their databases to develop a lifestyle profile of each of the top five executives at their best clients’ sites. The result was more-focused relationships, which soon doubled the client base through referrals alone. Even more significantly, the strategy freed Capitol Concierge from having to discount its services to attract new customers in the face of growing competition. That strategic shift positioned Capitol Concierge ahead of the pack. With concierges in more than 80 downtown commercial office buildings by 1995, Capitol Concierge was clearly the predominant provider of on-site concierge services in the Washington, D.C., area. Given that many of her clients’ businesses extended well beyond the D.C. area, Naylor wanted to find a way to nationalize her concept. The solution, which was to become Concierge Club, came to her as she recognized the potential of the Internet to become less of an on-line encyclopedia and more of a means of commerce.
The Concierge Club Solution Spun off from and seeded by Capitol Concierge in 1997, Concierge Club was started with $20,000 and the goal of becoming the first concierge service to offer full Internet capabilities. Marketing itself to companies seeking nationwide concierge services as a customer or employee
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benefit, Concierge Club provided its services through a call center while it developed its Webenabled proprietary concierge software. The company planned to offer a cost-effective, comprehensive Internet service menu that integrated e-commerce with state-of-the-art, callcenter software support. The service would be accessible to customers 24 hours a day, seven days a week. In addition, it would incorporate Internet “push” technology into the Web site that would proactively send personalized e-mail reminders and recommendations to customers at regular intervals. Critical to the company’s success was offering a wide range of products and services. One of the compelling advantages of the firm’s concierge service was its ability to provide customers with access to multiple services and products within one transaction and one Web site. Eventually, the company planned to provide its customers with access to more than 2,000 products from nationally recognized brands. Concierge Club’s product offerings could be categorized as follows: •
Personal services (brand-name merchandise, flowers, gifts, event tickets, travel, personalservices network)
•
Personalized services (personal profile, special-occasion reminders, gift recommendations, personal gift registry, personal address book, historical purchase reports)
•
Business services (communication services, professional services, office services, equipment/supplies, executive suites, long distance, payroll)
•
Client support services (product servicing and ordering, merchant aggregation of processing, Web-enabled call-center management, customer service, database management, analysis, and reporting)
The company currently had a network of brand-name suppliers that included Godiva, Pepperidge Farm, The Museum Company, Omaha Steaks, Liquor by Wire, Aveda, Popcorn Factory, Coach, Peets Coffee & Tea, SpaWish, and Balducci’s. Those suppliers provided the following types of products and services: •
Flowers: The company had an exclusive arrangement with USA Floral for “next-day” flowers shipped directly from the grower. In addition, Concierge Club provided traditional wire and local floral arrangements through national floral networks.
•
Gifts: Concierge Club offered an extensive line of gift products in the following categories: gourmet foods, theme gift baskets, spa gift certificates, chocolates, homedécor items, wines and liquors, cakes, novelty gifts, children’s gifts, books, cigars and accessories, golf items, jewelry, crystal, and logo-imprinted items.
•
Tickets: Concierge Club had relationships with national ticket providers to offer premium tickets to sold-out events. It had access to the “best tickets” for national and international sports events, concerts, and Broadway shows.
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•
Transportation services: The company arranged sedan airport transfers and limousine services through established national networks.
•
Personal-service network: Ultimately, the company planned to select regional market partners to develop and maintain a database of services that could best be fulfilled by local providers. Examples of these services included housecleaning services, grocerydelivery services, dry cleaning, and auto services. The services Concierge Club offered generated revenues from several sources, including:
•
Product transactions: For these transactions, Concierge Club was a “broker of services” and received prenegotiated commissions from all service and product sales. The product margins ranged from 20% to 30% of the full retail price. On an average $60 sale, the company netted $15.
•
One-time development fees: The company charged a one-time fee for incorporating a client’s logo and custom offerings into the company’s Web site. Those fees ranged from $25,000 to $50,000.
•
Management fees: The company received an annual management fee for call-center services and Internet delivery of services in the form of a per-member fee based on client population. Annual management fees averaged $275,000, based on the scope of work.
•
Placement fees from service vendors: As Concierge Club increased traffic and the volume of product sales, it expected to be able to charge placement fees to its service vendors for the promotion of products and services on its Web site. The company had yet to determine pricing for placement fees.
•
Consulting fees: Based on its experience with special-project requests from existing clients, the company expected to generate additional revenue from special-project activities.
Marketing and Operating Strategy Concierge Club planned to attack the market on two fronts: (1) strategic partner links with high-traffic Internet companies and (2) corporations that wanted to offer a cobranded concierge service as an employee- or customer-retention tool. The company’s value proposal to prospective clients (e.g., credit card issuers, luxury consumer product manufacturers, and other large employers) was the development of a concierge Web site that would deliver a highly personalized, one-to-one experience for customers or employees. The company would also be able to provide its clients with useful data on their customers’ preferences and buying patterns. Finally, the company’s model provided its clients with a low-cost tool for generating revenue for the client and building a foundation for retaining customers and rewarding employee loyalty. Exhibit 1 details several components of the firm’s business model.
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To ensure that her service would be extremely low-cost to her clients, Naylor devised a sliding scale based on the size of the population to whom the client wished to offer concierge services. She stated, “For example, by charging our clients such as MasterCard just 50 cents per year per cardholder, we were providing a very inexpensive, high-loyalty, high-touch, and highinformation capture service.” The company planned to create barriers to entry and sustain its competitive advantage by leveraging its 11 years of concierge experience in providing multiple services person-to-person and over the phone. The firm was the first e-commerce concierge service to market, and had an established clientele of blue-chip corporate clients. Concierge Club already had a comprehensive national vendor network in place and proven merchandising ability. It employed the latest technology with exclusive order-processing applications, computer telephony, and push technology. Its Web site had the capacity to provide on-line live responses for reservations, information, and referrals. Finally, its experience gave it an on-the-ground network of regional concierge partners to fulfill “daily life” services at a local level. Exhibit 2 provides information on Concierge Club’s key competitors.
The Angel Round, June 1998 To help her execute the Concierge Club strategy, Naylor hired Sally Hurley, who had been one of Naylor’s first hires at Capitol Concierge 10 years earlier. Using the offices of Capitol Concierge, Naylor and Hurley spent 18 months trying to sell their concept to companies seeking nationwide concierge services as a customer or employee benefit. They focused their efforts on the top 10 to 20 brand names in targeted industries. Once again, the Charles E. Smith Company was their first client, followed by Mercedes-Benz. By early 1998, they had signed multiyear contracts with MasterCard International and Diners Club. As business grew with the new clients, it became clear they could not continue to piggyback on Capitol Concierge’s call-center resources to service their customers. Further, they needed to develop the Web-enabled proprietary concierge software that was the foundation of their business plan. Naylor estimated that $600,000 of additional financing was necessary to begin the process of separating from Capitol Concierge. The angel funds would be used to bootstrap the existing software to deliver solid performance on a wider scale, secure the salaries of the founding team members, and provide cash for working capital. To raise those funds, she turned to the company’s founding angels, Simmons and Tietelbaum. The funds were quickly raised through their network of personal contacts and Simmons’s investment of $175,300. Exhibit 3 summarizes the angel round and the pre-Series A capitalization of the company.
Future Plans and Financing Requirements, December 1999 Following the injection of capital from the angel round, Concierge Club continued to develop its blue-chip client list. By the end of 1999, many of those clients had been signed to
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multiyear contracts, including MasterCard International, Mercedes-Benz, Diners Club, Danmark International, and CarrAmerica. Exhibit 4 provides the consolidated financial highlights, key client forecasts, and the underlying financial-performance assumptions for Concierge Club over the next several years. By all accounts, Concierge Club was well positioned to leverage its national clients’ large population bases and its cobranded affinity-marketing strategy to build a customer base of 36 million in two years. By capturing only a small percentage of this opportunity, the company had the capability to generate a minimum of $40 million in revenue within three years. The company also enjoyed national recognition as a first-mover and proven leader in the concierge-service industry. Mary Naylor was seeking to raise $6 million in additional funding to further her expansion plans over the next several years. The firm had incurred a combined cash shortfall of some $1.43 million during 1998 and 1999, and expected another $2.0 million cash shortfall in 2000. Although the firm had enjoyed healthy gross margins since its inception, selling expenses had exceeded gross profits in the early years. As competition entered the market, the cost of obtaining new clients was also likely to rise. Over the past two years, the company had used the angel funding to increase the number of its employees from five to 17 and its corporate partners from two to five. That growth, however, was small in relation to what Naylor thought she could achieve with the new funds. In FY2000 alone, she projected a doubling of the number of corporate partners and a more than fourfold increase in Concierge’s customer base. The result was a sharp increase in the potential revenues the firm could earn. While the current client list and customer base were impressive, Naylor had several proposals in process with blue-chip and Fortune 100 firms, including General Electric and Citigroup. Confident that Concierge Club would win the business, Naylor was concerned that without additional funding to bolster the company’s technology infrastructure and hire additional staff, she would be unable to service the business adequately. Failure to provide less-than-excellent service to blue-chip clients would be particularly damaging to her reputation. For those reasons, the company was seeking the new funds. Naylor and her management team planned to use 75% of the proceeds for completion of technology development (e.g., software, hardware communications, and networking) and 25% for personnel and other administrative and selling costs. The environment for venture investing in 1999 was extremely robust. Postmoney values of early-stage investments had risen from a median of $12.0 million in 1998, to $16.0 million, in 1999—nearly double the value of two years earlier. The financial press was full of accounts of entrepreneurs and investors alike getting rich through a record number of initial public offerings. Exhibit 5 shows the valuations of early-stage deals in Internet-related consumer and business services. Although no exactly comparable company existed among publicly traded firms, there were a few companies with an on-line presence in the travel and specialty-retail industries that might provide a guide to the value of Concierge Club. Exhibit 6 provides information on market comparables in the travel and specialty-retail industries. None of those companies combined services the way Concierge Club envisioned, but each represented the types of services it planned to offer its clients.
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To Invest or Not to Invest? A company with blue-chip customers committed to multiyear contracts, Concierge Club was in need of additional funding. Was it a good investment for the Dinner Club and, if so, on what terms?
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Exhibit 1 CONCIERGE CLUB: SERIES A ROUND Overview of Key Elements of the Business Model CONCIERGE CLUB MODEL COMPONENTS COMPONENT NAME Client
DEFINITION Corporation or organization that promotes concierge services to its customers or employees as a benefit
Customer
Individuals who have access to concierge services via their relationship with a client
Service-vendor partner
Providers of products or services authorized to conduct transactions via the Concierge Club Network
Conciergeminder tool
Proprietary-profile and pushtechnology tool used by Concierge Club to deliver personalized recommendations and reminders via e-mail
• • • • • • • • • • • • • • • • • • •
EXAMPLES MasterCard Mercedes-Benz Fannie Mae Charles E. Smith Cardholders Members Owners End users Employees Godiva USA Flora Balducci’s Top Centre Tickets Front Gate Sharper Image Special-occasion reminder service Favorite gifts to give Enter and review preference Gift registry
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Exhibit 2 CONCIERGE CLUB: SERIES A ROUND Analysis of Competitors
COMPETITOR TYPE
COMPANY
ANALYSIS
Other concierge services
• • •
Bur Corp Les Concierges Two Places at One Time
None had developed e-commerce applications; focus is on-site staffing and personal-errand services; speed to market is critical; Concierge Club 18 months ahead of competitors
Internet malls/portals
• •
SkyMall Yahoo
Provide access to multiple products or services but without consolidation of purchase in a single transaction; not offered as cobranded affinity program
Product or service vendors’ Web sites
• • • •
1-800-Flowers.com Egift.com Garden.com BarnesandNoble.com
Focus on their primary product lines; have not developed nextgeneration personalization; powerful brand recognition; may be converted to vendors
Client companies’ in-house service
• • •
MasterCard Mercedes-Benz Fannie Mae
Have resources to build own in-house services; do not want to build service-vendor network; these companies historically outsource call-center or Web services
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Exhibit 3 CONCIERGE CLUB: SERIES A ROUND Pre-Series A Capitalization Table Common Stock
Founders’ Shares Investor Cal Simmons Mary Naylor Mark Tietelbaum Steve Ettridge Don Vetal John Hechinger Harry Gellar Sally Hurley Total
1,178,805 1,178,805 1,178,805 420,485
Angel Round Angel Amount Shares Invested 175,300
$175,300
228,256 22,044 87,650 87,650
$228,256 $22,044 $87,650 $87,650
600,900
$600,900
22,789 3,979,689
Fully Diluted* 1,354,105 1,178,805 1,178,805 648,741 22,044 87,650 87,650 22,789 4,580,589
Ownership Percentage 29.56% 25.73% 25.73% 14.16% 0.48% 1.91% 1.91% 0.50% 100.00%
Notes: All angel-round common shares were valued at $1.00 per share. *Fully diluted shares do not reflect an ungranted option pool of 862,512 common shares, which were reserved under the company’s Equity Incentive Plan.
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Exhibit 4 CONCIERGE CLUB: SERIES A ROUND Financial Highlights and Performance-based Projections
Financials
FY98 (A)
FY99 (A)
Revenues Cost of goods sold Gross margin SG&A EBITDA Interest expense Depreciation expense Taxable income Income-tax expense at 35% Net earnings Adjustments for cash flows Capital expenditures Working capital Add back depreciation Free cash flow
$755,000 77,250 677,750 714,950 ($37,200) 0 0 ($37,200) 0 ($37,200)
Key company statistics No. of corporate partners No. of affiliate partners Potential customer base Employees Note:
A = Actual F = Forecasted
FY00 (F)
FY01 (F)
FY02 (F)
FY03 (F)
$1,158,138 312,750 845,388 1,391,692 ($546,304) 16,000 201,000 ($763,304) 267,156 ($496,148)
$6,949,247 2,944,125 4,005,122 4,774,326 ($769,204) 0 671,600 ($1,440,804) 504,281 ($936,523)
$20,088,913 10,185,750 9,903,163 8,141,111 $1,762,052 0 997,960 $764,092 (267,432) $496,660
$40,319,993 20,587,500 19,732,493 15,269,011 $4,463,482 0 843,776 $3,619,706 (1,266,897) $2,352,809
$69,672,704 37,575,000 32,097,704 22,468,114 $9,629,590 0 552,576 $9,077,014 (3,176,955) $5,900,059
8,000 0 0 ($45,200)
1,030,000 54,880 201,000 ($1,380,028)
1,775,000 (23,992) 671,600 ($2,015,931)
1,275,000 50,662 997,690 $168,688
500,000 (22,343) 843,776 $2,718,928
500,000 (73,752) 552,576 $6,026,387
2 0 1,000,000 5
5 200 3,942,500 17
10 2,000 17,335,000 35
20 20,000 35,750,000 42
30 25,000 70,500,000 48
40 50,000 125,162,500 53
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Exhibit 4 (continued) Assumptions: Product sales: Represents products and services purchased by partners’ customers, employees, or independent site visitors. Average purchase is $60. Projected response rates for affiliate partners are 1.5% click-through and 1% conversion-to-sale. Projected response rates for corporatepartner customers are 5% click-through and 20% conversion-to-sale; average customer population per corporate partner was estimated at 100,000. Customers were projected to make one purchase per quarter. Membership fees: Customers who arrive at the Concierge Club site independently or via an affiliate partner will have the option of purchasing a monthly membership to VIP services for $18.95 a month. It is assumed that our affiliate traffic will generate 25,000 unique visitors per quarter per affiliate. Of these, 1.5% will click through, and 1% will purchase a monthly membership. Management fees: Represent annual fees paid to the Company for corporate partnerships. Corporate-partnership fees will average $275,000 per partner annually. Regional partnership fees: The Company will be establishing a network of CityConcierge services that provide localized services for specific large markets. Each regional partner will pay annual licensing fees of $5,000, plus a one-time training fee of $7,000. Sponsorship income: Represents advertising fees paid to the Company by vendors to highlight and promote their products on the Concierge Club’s Web site. Source: Internal company documents.
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Exhibit 5 CONCIERGE CLUB: SERIES A ROUND Pre- and Postmoney Values of Early-Stage Deals* (Industries include computer, other communications, business services, and consumer-related Internet-specific sectors) in $millions
Premoney Value
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Total or Average
Postmoney Value
Total Value $ 93 61 120 108 441 1,183 2,309 1,752 5,084 10,811
Average Value $13.3 10.1 5.5 6.0 11.0 11.0 13.9 10.4 18.9 17.9
Upper Quartile $ 21.7 13.6 6.2 10.1 12.5 11.7 10.2 12.6 16.8 19.5
Median $14.0 4.3 4.5 3.9 6.2 5.5 4.8 5.8 7.6 9.8
Lower Quartile $6.0 3.5 1.5 2.9 3.0 2.7 2.3 3.2 4.0 5.3
Total Value $ 116 75 190 158 592 1,562 3,066 2,530 6,719 16,001
Average Value $16.6 12.4 8.6 8.3 14.8 14.2 18.0 14.5 24.3 26.1
Upper Quartile $24.2 18.9 11.6 11.5 16.0 16.1 16.9 18.3 24.1 29.9
$21,962
$11.8
$13.5
$6.6
$ 3.4
$31,008
$15.8
$18.8
*Includes venture-related deals in the seed, startup, first-stage, early-stage, and other early categories. Source: Thomson Financial, Inc., Venture Economics.
Median $15.4 6.1 6.6 6.0 9.5 8.7 7.5 9.7 12.0 16.0
Lower Quartile $ 9.5 4.8 3.4 5.5 5.2 4.0 4.2 6.0 6.3 9.0
$9.8
$5.8
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Exhibit 6 CONCIERGE CLUB: SERIES A ROUND Market Comparables for Travel and Specialty Retailers December 31, 1999 (in millions of dollars except per-share items)
Company Name (Ticker)
1-800FLOWERS (FLWS)
BROOKSTONE (BKST)
SHARPER IMAGE (SHRP)
CARNIVAL CORP. (CCL)
SABRE HLDGS (TSG)
$294.4 6.0 $15.0 5.1 141.0 $9.3 $0.9
$3,497.5 16.5 $943.9 27.0 19.6 $1,027.2 $1.7
$2,434.6 14.2 $372.5 15.3 4.5 $331.9 $2.6
Selected income-statement items Sales, net Sales, 3-yr. CAGR (%) Earnings before interest and taxes (EBIT) EBIT margin (%) EBIT 12mm 3-yr. CAGR (%) Net income (loss) EPS basic, excluding extra items
($37.2) ($0.8)
$319.6 11.5 $22.7 7.1 29.1 $13.3 $1.1
Selected balance-sheet items Cash Total current assets Total assets
$99.2 $121.2 $182.4
$17.4 $67.5 $114.6
$8.4 $55.8 $82.0
$544.6 $791.6 $8,286.4
$611.1 $976.4 $1,951.2
Debt, current portion Total current liabilities Total long-term debt (LTD) Total stockholders’ equity
$6.6 $35.6 $27.5 $109.0
$0.1 $29.7 $2.6 $72.3
$0.6 $39.8 $2.5 $36.6
$206.3 $1,404.9 $867.5 $5,931.2
$0.0 $525.1 $0.0 $1,262.0
20.1
3.5 16.2 2.9 6.4 0.5
6.4 14.3 3.1 7.8 0.4
12.8 28.5 5.0 32.4 8.7
0.0 20.0 5.3 17.9 2.7
0.7 $143.5 $146.2 $17.6 6.5 5.6
2.2 $113.1 $116.3 $12.7 6.5 5.6
1.2 $29,499.0 $30,572.8 $47.8 6.5 5.6
1.4 $6,652.0 $6,652.0 $51.3 6.5 5.6
Selected ratios LTD to total capital (%) Price/earnings (×) Price to book (×) Enterprise value to EBIT (×) Enterprise value to sales (×)
$333.5 34.1 ($41.8) (12.5)
1.5
Other firm and capital-market information Beta coefficient 1.2 Market capitalization $474.0 Enterprise value $508.1 Stock-price close, December 1999 $10.7 U.S. Treasury notes, 10-year (%) 6.5 U.S. Treasury bills, 12-month (%) 5.6 Source: Standard and Poor’s Research Insight on the Web.
